Blog, Market, Real Estate
New Home Sales Up – Nationwide
August 12, 2009 by heighlo · Leave a Comment
The Commerce Department reported that new home sales rose 11 percent in June to a seasonally adjusted annual rate of 384,000, from an upwardly revised May rate of 346,000. WOW. It is the fastest increase in more than eight years for new construction home sales.
Indeed home prices are still falling, but the improvement in new construction sales is another sign the national housing market is starting to bounce back. Earlier this month, the government reported that national home resales rose almost 4 percent in June, the third straight monthly increase.
“The worst of the housing recession … is now behind us,” said David Resler, chief economist at Nomura Securities. “We’re turning the corner toward increased activity in housing.”
The median national sales price of $206,200 was down 12 percent from $234,300 a year earlier and off nearly 6 percent from $219,000 in May. In addition to lower prices, buyers are rushing to take advantage of a federal tax credit that covers 10 percent of the home price or up to $8,000 for first-time buyers. Home sales need to be completed by the end of November for buyers to take advantage. You must close by November 30, 2009.
June’s results were the strongest sales pace since November 2008 and exceeded the forecasts of economists surveyed by Thomson Reuters, who expected a pace of 360,000 units. The last time sales rose so dramatically was in December 2000.
There were 281,000 new homes for sale at the end of June, down more than 4 % from May. At the current sales pace, that represents 8.8 months of supply which is the lowest level since October 2007. Some analysts say that when the inventory falls down around a 6 month supply, builders will feel more comfortable ramping up construction.
Portions of this article were sourced from a July 2009 article by real estate columnist Alan Zeibel & FMLS
